Freeport-McMoRan (ticker: FCX) announced today a purchase and sale agreement to sell its onshore California oil and gas properties to Sentinel Peak Resources California LLC for total consideration of $742 million, including contingent consideration.

Under the terms of the agreement, FCX will receive cash consideration of $592 million at closing and additional consideration of $50 million per annum in each of 2018, 2019 and 2020 if the price of Brent crude oil averages $70 per barrel or higher in that calendar year. The purchasers will also assume future abandonment obligations associated with the properties, which had a book value of approximately $0.1 billion at June 30, 2016.

Freeport-McMoRan looks unlikely to get the $150 million in contingent consideration, however, based on today’s futures contract pricing. The ICE futures curve for Brent does not break above $60 per barrel in the next three years, and never goes above $62 per barrel out into 2023.

Trailing twelve month production for the onshore California assets averaged 28.6 MBOPD as of June 30, 2016, the company said in its press release. Over this period, revenues totaled $0.4 billion, cash production costs (before G&A) totaled $0.3 billion and capital expenditures totaled $0.04 billion.

The company said that it plans to use the proceeds from the asset deal in order to pay down its debt, which stands at $18.5 billion, with about $1.7 billion due in 2017.

Sentinel Peak was formed earlier this year by Quantum Energy Partners and Michael Duginski, formerly the COO of Berry Petroleum. At Berry, Duginski helped the company grow from a $300 million enterprise to a top operator in California and a $4.9 billion enterprise when sold in 2013.

Duginski will be joined by George Ciotti, CFO and Tim Crawford, COO, who both worked with Duginski at Berry and George Paspalof, VP Operations LA Basin, an experienced California operator. Together this group will be hiring from existing Freeport-McMoRan staff and complementing them with other top operating, technical and commercial talent in their corporate office in Denver and new offices in California, Sentinel Peak said in its press release.

Following completion of this transaction and the previously announced Deepwater Gulf of Mexico (GOM) sale, FCX’s portfolio of oil and gas assets would include oil and natural gas production onshore in South Louisiana and on the Shelf of the GOM, oil production offshore California and natural gas production from the Madden area in Central Wyoming. In the second quarter of 2016, these properties produced an average of 8.6 thousand barrels of oil and natural gas liquids per day and 78 million cubic feet of natural gas per day.